Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons. A new session of the Arizona state legislature starts Monday, January 14th. Here now to tell us what to expect is senate president Andy Biggs, a Republican from Gilbert. And speaker of the house, Andy Tobin, Republican from PaulDEN. Let's start with an overview. What are your goals for this session?

Andy Biggs: My goal is to keep the budget balanced this year and in the future, get us out of here on time.

Ted Simons: Past successes, past failures. Talk about them, how they might impact how business is done this go-round.

Andy Biggs: I think the past we've been very successful the last few years communicating with the world, the need for a balanced budget and getting that balanced budget through, getting it out, getting the legislature out within 100 days, which has been a new thing really, for my legislative experience. And I think those are really big successes. Some of the failures, I think there's policy issues members wanted to get through, but I don't know that those are failures so much as just the normal give and take of the legislative process.

Ted Simons: As far as your goals, what happened in the past you'd like to see either enhanced or changed?

Andy Tobin: I'd like to see us -- See Arizona grow more jobs. The government doesn't do that, private business sector does. I think we work hand and hand with this governor about cutting taxes and sending a good message as the president said to the world that hey, Arizona is open for business, and now we're the number one new job market in the country for entrepreneurs, I think that's special knowing that president Biggs and I had that when we weren't sure we had payroll, like Friday. So I think this has come a long way and the best part about moving forward into this session, we have a lot of new, bright, young lawmakers just anxious to go with the real hope and care for Arizona, I think it's going to be a great session.

Ted Simons: Talk to us about that dynamic of the new folks down there. The older folks know what's going on, newer folks you're not quite sure.

Andy Tobin: We have term limits in Arizona. I might not be speaker if we didn't have term limits. I think the idea is we give folks a chance to get in, get their feet wet in a hurry, but that's what our constituents want. They want us to solve the problems of the day, and if there's going to be debates, it's supposed to happen on our floors, and I think we've got as good a class of new folks showing up down there, Republicans and Democrats. Good group of folks who are dedicated to work, and I'm anxious to get to work with them.

Ted Simons: Let's talk about some issues. We'll start with Medicaid and the concept of expanding coverage. What are the options the state faces, where do you see those options?

Andy Biggs: We really have several options, and there's consequences of course to every choice that we might make. If we could expand fully and do it quickly, if we do that the impact over from fiscal year 2014 to 2017, $33 billion dollars total spending there counting both the federal and state portion. And you may not be aware of this, but Arizona is right at the national average for Medicaid spending. And so another option we have is to just keep going where we are and let the ACA come into -- Come into its own within moderate time frame that would slow down the impacts, but we know one thing, that we built in money for fiscal year 2014, to deal with the immediate impacts. Any expansion we have leads to a future deficit. And that's one of our concerns.

Ted Simons: Some would say if you can get these matching funds from the feds, that would help ease that deficit.

Andy Tobin: Well, the feds are $16 trillion in the hole. The question is, how long is this trough going to keep printing money? I have no faith in the federal government coming to help Arizona. What they could do to be helpful is help us with the job market, which means help us with a land swap, so superior mine doesn't shut down, help take the pressure off the Navajo generating station. Now that we're finally competitive with our tax structure, now they have to worry about water and power expense because of the EPA. So I think the answer, we'd love to be able to work well with Washington. Our delegation agree with us that if they get out of our way, we could do some better things. But while we have these constraints I don't know how we -- We can't find our way back out of the hole, and that's going to be a priority.

Ted Simons: For those who do say if you spend $2 to make $1, it works to the benefit of Arizona, you say --

Andy Tobin: to those who want me to spend $1 of what money we really know to get $2 of money, we're never sure of, I say the pie in the sky would be very nervous.

Ted Simons: Are we never really sure about that? Spend $1 to make two. I have it backwards.

Andy Biggs: You don't know for sure, number one. Number two, you're talking about, it's a really complex issue. What you're talking about is in order to do that, you're going to have to do an additional tax, which ultimately gets passed on the consumer. And that is not necessarily good for the consumer, not necessarily good for the state overall. So you really need to measure this complex issue.

Ted Simons: And yet there are some who say the uninsured make for a hidden health care tax.

Andy Biggs: Well, I would agree that there's certainly expenditures, especially in the rural hospitals. The uncompensated care is a real problem, but the answer is to -- If we put people to work and we make -- We help businesses come here and be able to afford benefits like you just left Chandler, Intel is out there, they have benefits. Do we want to raise the costs on those people? No we dont. But if we can make our markets here better for job creation we'll have folks with commercial benefits.

Ted Simons: Uncompensated care is a major factor, hospitals and health care providers are hurting, one in five Arizonans uninsured. How do we deal with this?

Andy Biggs: Drive around and look at any metropolitan area hospital. You will see capital expansion on virtually all those. You'll see a synthesis, where the hospitals are forming systems as opposed to -- And they're hiring doctors for themselves. They don't really define -- If you go group by group, they have different definitions of themselves of what uncompensated care is. We're fighting a complex issue, but one thing we do know for certain, and like the speaker says, we want to create jobs. We want jobs to come in, but at the same time we don't want to send the state back, so two years from now we have a billion dollar deficit. Which is really what you're looking at. That's not a legacy anybody wants.

Ted Simons: Are you suggesting that hospitals and health care providers do have the money, they're just using it for things that don't include uncompensated care?

Andy Biggs: What I'm suggesting to you is, why -- I'm confused, I think they send us mixed signals when they're expanding their capital infrastructure at the same time they're saying, we want you to give us more indigent people so we can get -- Treat more, get more government funding. It seems to me that is a business structure that's got problems. So when the speaker says he doesn't trust the federal government, I'm not sure why I'd build a business model where I'm dependent, very heavily, on government transfers of payment.

Ted Simons: Do you agree with that?

Andy Tobin: There's a lot of pieces of this puzzle that you have to really include. We spend a million dollars a day on debt service. A lot of that debt was debt we accumulated because we probably didn't cut the budget fast enough. We tried for the soft landing, that's why we got money, we borrowed on our building, but a million dollars a day. That takes a lot of that extra worry out of the equation. Maybe you can jump in with a little bit of risk, but we're on a feather point with the feds, we're not sure how this economy is going to move. If we go ahead and move the budget that's going to commit us for three years going out, and the money doesn't show up, I'll be leaving the legislature with the same problem I inherited, and I'm not likely to do that.

Ted Simons: There's concern that once the session starts that guns will be a major topic, maybe superceding a lot of other things. The idea of armed guards in schools, armed teachers and administrators, your thoughts?

Andy Tobin: First off, the safety officers were cut by the federal government so that's where this started, and I know representative Campbell I think he's encouraged to bring this back and spend more money. I will share with you that we put money back in the K-3 education, we put money back into mental health. A lot of the press isn't reporting about, that but it's the largest increase in mental health I've known of in Arizona. 40 million dollars a year. Almost half a billion over the next 10 years.

Ted Simons: Did it match previous cuts?

Andy Tobin: Where are you going to go? All the way back and say I've got to restore billions of dollars of government that grew from where it should haven't in the first place? The answer was, we put money back in DPS, we put money into mental health, education, and gave them the ability to move money from M&O and the capital and back and forth. So some of the schools can do this on there own.

Ted Simons: What do you think about armed guards, armed teachers, armed administrators in public schools.

Andy Biggs: I think it's an interesting concept. It's going to be one that comes to the forefront of the legislature. I think people are going to discuss it. I'm not sure where it ends up going.

Andy Tobin: Some schools may want it and some schools may not. We need to be careful that people don't politicize this issue. This is a crazy person who shot 6-year-olds. Those people are not a dime a dozen. This is -- I'm not saying these incidents are isolated, because you have been seeing more, but let's make sure somebody isn't making political hay out of a crisis like this. Let's sit down and have some conversation and really talk about it.

Ted Simons: We have talked to some education folks and it seems like among the many concerns is that particular gun issue. Another concern is that assessments and standards are increasing for teachers and for kids, who's going to pay for those who assess the assessments?

Andy Biggs: You know, one thing you have to realize is over the last -- In 2010, the NCSL organization put out a number on how much the general fund of each state puts out. And roughly 35% of the -- Is the national average. Arizona is over 40% of our general fund money goes to education. We're paying for education. In our baseline for 2014, we're fully funding all the expansions that the formula expansions that are in K-12 education. So we're putting the money there. The real issue that you have, in my opinion, is you are looking at a top-down approach from the feds with the new common core. There are all kinds of issues. There are states backing up and saying, wait, we're not sure we like what's in the common core, we're not sure what the curriculum is going to do. We're not sure how much it's going to cost. So we're getting some pretty large numbers that we're hearing to implementation of the common core. I think that is something we really have to look at very closely to see.

Ted Simons: As far as uniform standards, and again, those who say that higher standards all along the line, but we gotta have folks who can figure out if we're meeting those standards, that's administrative cost and a lot of folks say there's too much administration costs already.

Andy Tobin: I agree. I'm one of those that, I don't want any more administration. I would like to find these dollars going into the teachers' hands, and I believe because a lot of teachers -- And I have a small group of educators who see me, and they said, what -- Where do you need help? They say K-3. That's what they said. We carried that message to our members. That wasn't just me, it was educators from all over. We need this early childhood development money. That's where it helps us. And that K-3 money goes in without all its additional administration costs, it's $38 million last year in the K-3 education. That's not a bad start. And we still have work to do.

Ted Simons: Overall, is education funded enough?

Andy Tobin: I think we can do better. I think we can do better. I think our members are hearing we can do better. The world is changing. We got some kids on their iPhones and they're getting more information off an iPhone than in some of the classrooms. I get it. There's a disparity that is out there. And these kids coming up are so much brighter than I am, and I was, but I think at the end of the day we need to give them the resources to make Arizona the best work force state in the country. And I am not embarrassed about it. I've got five. Public school.

Ted Simons: You mention the work force. Business interests will say, you can attract business with tax cuts and credits, only so much, you've got to have the educated work force, you've got to have an education system in which they're confident their children will get the best education. They're concerned about that. Is that a valid concern?

Andy Biggs: Here's the problem. I don't believe it is. I just pointed out a figure that comes from NCSL which is not really what you'd call the most Arizona friendly organization. We fund 5% high I than the national average for K-12 education. But when you move beyond that, this constant negativity towards Arizona's education I think is entirely misplaced. Arizona has great educational opportunities whether it's ASU with more fulbright scholars than any other University in the nation except Princeton. If it's the fact we have more school choice than any other place in the country, where if you want a crackerjack top flight education for your kids you can get that. I am not convinced that education is under funded. What I am convinced is we as a society need to, whether it's legislators or parents, or the community, we can keep putting a greater emphasis on education. But I do not buy into the constant negative message about Arizona's education. I believe, look, we're trying to recruit California companies to come here. Let's face it. California is throwing their economy into the dumper. What we would like is we'd like those CEOs to come to Arizona and they are concerned about education. But they're coming from a state that was so concerned about education, that they passed a law that said parents can shut down a school. Not only did they pass the law, they acted on that that law. We don't have that here. What we have is genuine choice for parents. For education. We have a good system, we need to emphasize the positives of Arizona. Instead of constantly ripping apart our state.

Ted Simons: We've got about a minute left. With that in mind, some critics will say, and have said, and continue to say that the legislature is out of touch with most Arizona residents. You say --

Andy Biggs: I say that I disagree. You look at the people that get elected year after year, and I think we do a pretty good job.

Ted Simons: When it comes to education, health care, when it comes to these immigration, all these, gun control, gun issues, again, some say, and I see this -- Hear this a lot, out of touch seems to be the phrase. How do you respond?

Andy Tobin: It's just political babble. I'm not out of touch. I've got five kids who have gone through the public school system, we're active in our communities. A lot of these good and decent people come down to the legislature take a lot of punches from folks who don't give them credit for doing a lot of things. We have a University of Arizona medical school right down here, this legislature helped fund that expansion in the last session. But those people who say we're out of touch, I wonder what they'd say about that? Look what we've done to put back, when you have a state that's on the verge of bankruptcy and in the abyss, and we lead this state out in -- We're out of touch, I don't think so.

Ted Simons: All right.

Andy Tobin: I think those people owe the legislator who's saved this state a deep apology.

Ted Simons: Thank you for joining us. We look forward to seeing you as the session begins.